Managerial Accounting. Relevant CostRick Nicotera sells special terra-cotta trays that are perfect for planting in dry climates. The trays have per-unit variabl

Rick Nicotera sells special terra-cotta trays that are perfect for planting in dry climates. The trays have per-unit variable production costs of $15 and fixed costs of $4 (based on 8,000 units). Rick's company has excess capacity to accept a special order of up to 500 units.

What is the minimum price that could be charged for this special order?

If you sold the 500 units at a price that was equal to the total cost i.e. 19x500 = $9500 Rick would cove his cost and keep the plant working but would make $0 margin. I would say this is the minimum price.